Fitch Downgrades Two Distressed Classes of GMAC 2002-C3

April 16, 2014 04:15 PM Eastern Daylight Time

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed five and downgraded two classes of GMAC
Commercial Mortgage Securities, Inc., commercial mortgage pass-through
certificates, series 2002-C3 (GMAC 2002-C3). A detailed list of rating
actions follows at the end of this press release.

KEY RATING DRIVERS

The downgrades reflect an increase in Fitch-modeled losses on the
remaining pool as well as greater than expected realized losses on the
specially serviced loans disposed of since the last rating action. The
affirmations are due to sufficient credit enhancement to the remaining
classes. Fitch modeled losses of 36.5% of the remaining pool; expected
losses on the original pool balance total 4.9%, including $25.1 million
of realized losses to date. Fitch had modeled losses of 3.7% of the
original pool balance at the last rating action.

As of the April 2014 distribution date, the pool's aggregate principal
balance has been reduced by 95.3% to $36.4 million from $777.4 million
at issuance. The pool is extremely concentrated with eight loans
remaining, of which the four largest loans (86.7% of pool) were in
special servicing as of the April 2014 remittance report. One loan
(4.8%) was defeased. Cumulative interest shortfalls totaling $1.58
million are currently affecting classes J through P.

RATING SENSITIVITIES

The Negative Outlooks on classes L and M reflect the adverse selection
of the remaining pool as well as concerns with the ultimate workout of
the top four loans in the pool, which are all currently in special
servicing. Distressed classes (those rated below 'B') may be subject to
downgrades as losses are realized or if realized losses are greater than
Fitch's expectations.

The largest contributor to modeled losses is the pool's largest loan,
Broadmoor Apartments (28.3% of pool), which is secured by a 284-unit
multifamily property located in Tampa, FL. The loan was transferred to
special servicing in July 2012 due to maturity default. As of the March
2014 rent roll, the property was 78.7% occupied. In April 2013, the
borrower filed Chapter 11 bankruptcy. A court-ordered modification was
subsequently granted in November 2013, whereby terms included an
increase in principal, a reduction in interest rate, a four-year loan
extension, and a modified payment schedule with interest-only payments
for the first 18 months and principal and interest payments for the
remainder of the loan term. The bankruptcy has since been dismissed and
the special servicer continues to monitor the loan for timely payments.

The next largest contributor to modeled losses is the second largest
loan, Nashville Business Center (25%), which is secured by an 893,100
square foot (sf) industrial complex located in Murfreesboro, TN. The
loan was transferred to special servicing in November 2011 for monetary
default after a major tenant, Vi-Jon (a private health care and beauty
manufacturer) which initially occupied 50% of the space, vacated at its
May 2010 lease expiration. In September 2013, a modification was granted
whereby the loan was bifurcated into an A-note and B-note, the loan was
converted to interest-only for the remaining term, and the maturity date
was extended to July 2014 with two additional one-year extension options
if certain criteria are met. As of the December 2013 rent roll, the
property was 41.8% occupied by one sole tenant: Store Opening Solutions,
Inc. Per the rent roll, approximately 22.4% was leased by the tenant
until December 2015, while 19.4% was being leased on a month-to-month
basis. The tenant also has the option to lease another 8.2% on an
'as-needed' basis. The borrower is aggressively attempting to lease the
remaining vacant space. According to the special servicer, the loan was
returned to the master servicer on March 28, 2014.

The third largest contributor to modeled losses is the third largest
loan, Lake Park Pointe Shopping Center (20.3%), which is secured by a
79,945 sf retail property located in Chicago, IL. The loan was
transferred to special servicing in April 2012 for monetary default. The
prior largest tenant, Michael's Fresh Markets (53% of property square
footage), filed Chapter 11 bankruptcy and vacated. A portion of this
space was re-tenanted by Ross Dress for Less (32%) in November 2013. The
borrower requested a loan modification and is under negotiation with the
special servicer. Multiple forbearance agreements were executed,
including prior ones that had expired in December 2012, March 2013,
December 2013, and March 2014. The borrower has requested an additional
90 - 120 days to allow time to complete financing.

Additional information on Fitch's criteria for analyzing U.S. CMBS
transactions is available in the Dec. 11, 2013 report, 'U.S. Fixed-Rate
Multiborrower CMBS Surveillance and Re-REMIC Criteria', which is
available at 'www.fitchratings.com'
under the following headers:

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